By: lkarnd99
10/08/2009
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cont...
The Commercial Real Estate Bubble
In May, Bloomberg quoted Deutsche Bank CEO Josef Ackermann as saying, "It's either the beginning of the end or the end of the beginning." Bloomberg further pointed out that, "A piece of the puzzle that must be calculated into any determination of the depth of our economic doldrums is the condition of commercial real estate -- the shopping malls, hotels, and office buildings that tend to go along with real- estate expansions."
Residential investment went down 28.9 % from 2006 to 2007, and at the same time, nonresidential investment grew 24.9%, thus, commercial real estate was "serving as a buffer against the declining housing market."
Commercial real estate lags behind housing trends, and so too, will the crisis, as "commercial construction projects are losing their appeal." Further, "there are lots of reasons to suspect that commercial real estate was subject to some of the loose lending practices that afflicted the residential market.
The Office of the Comptroller of the Currency's Survey of Credit Underwriting Practices found that whereas in 2003 just 2 percent of banks were easing their underwriting standards on commercial construction loans, by 2006 almost a third of them were relaxing."
In May it was reported that, "Almost 80 percent of domestic banks are tightening their lending standards for commercial real-estate loans," and that, "we may face double-bubble trouble for real estate and the economy."[2]
In late July of 2009, it was reported that, "Commercial real estate's decline is a significant issue facing the economy because it may result in more losses for the financial industry than residential real estate. This category includes apartment buildings, hotels, office towers, and shopping malls."
SEE LINK FOR MORE |
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By: perceptions_now
10/08/2009
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lkarnd99,
The author is correct, regrettably, there are other factors, in the wings, waiting their entry visa into the US.
Commercial Real Estate, Residential Real estate, Debt Repayment, Peak Oil, Demographics, Currency Devaluation, to name just a few.
At present, the Fundamentals are far from being strong.
In fact, the global economic fundamentals are now at their lowest ebb, for many decades and we are in desperate need of some new, great innovation, to prevent terminal decline. |
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By: perceptions_now
10/08/2009
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Aging Baby Boomers and the Generational Housing Bubble: Foresight and Mitigation of an Epic Transition
Conclusion: On the Precipice of a New Era
Our analysis depicts a coming generational transition in the housing market that will upset the historic balance of buyers and sellers. Residents in most states are net buyers of homes well into their 50s. The resulting upward pressure on demand by the large baby boom generation will soon peak, and after age 70 they will be net sellers in all except three states. Mankiw and Weil (1989) may have miscalculated the timing of decline, predicting its beginning 20 years or more prematurely, but the baby boomers will finally start retiring from the housing market. Their demand for housing will begin to contract, and then will decline at an accelerating rate. Boomers will dominate the housing market, as they have through their entire adult lives, when the ratio of seniors to working-age adults soars by 67% in the next two decades. This tilt toward age groups that are net sellers of housing is historically unprecedented, and it challenges planners to foresee and forestall adverse impacts.
Link -
http://www.informaworld.com/smpp/section?content=a 789053981&fulltext=713240928
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Not sure about planners, but the bankers have missed the transition start! |
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By: perceptions_now
10/08/2009
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VIX Signals S&P 500 Swoon as September Approaches
The first global recession since World War II may worsen as more Americans get thrown out of work and the benefits of government spending wear off, according to Martin Feldstein of Harvard University.
"There is a real danger this is going to be a double dip and that after six months or so we'll have some more bad news," Feldstein, the former head of the National Bureau of Economic Research, said on Bloomberg Television last month. "We could slide down again in the fourth quarter."
Link -
http://www.bloomberg.com/apps/news?pid=20601087&si d=aV6OGPHTAuH8
===================
The September/October/Novembe r period may well see markets re-test their March lows. |
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By: perceptions_now
11/08/2009
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GEAB N° 36 is available! Global systemic crisis in summer 2009: The cumulative impact of "three rogue waves"
As anticipated by LEAP/E2020 as early as October 2008, on the eve of summer 2009, the question of the US and UK capacity to finance their unbridled public deficits has become the central question of international debates, thus paving the way for these two countries to default on their debt by the end of this summer.
At this stage of the global systemic crisis' process of development, contrary to the dominant political and media stance today, the LEAP/E2020 team does not foresee any economic upsurge after summer 2009 (nor in the following 12 months) (1). On the contrary, because the origins of the crisis remain unaddressed, we estimate that the summer 2009 will be marked by the converging of three very destructive « rogue waves » (2), illustrating the aggravation of the crisis and entailing major upheaval by September/October 2009.
LEAP/E2020 believes that, instead of "green shoots" (those which international media, experts and the politicians who listen to them (5) kept perceiving in every statistical chart (6) in the past two months), what will appear on the horizon is a group of three destructive waves of the social and economic fabric expected to converge in the course of summer 2009, illustrating the aggravation of the crisis and entailing major changes by the end of summer 2009 more specifically, debt default events in the US and UK, both countries at the centre of the global system in crisis. These waves appear as follows:
1. Wave of massive unemployment: Three different dates of impact according to the countries in America, Europe, Asia, the Middle East and Africa
2. Wave of serial corporate bankruptcies: companies, banks, housing, states, counties, towns
3. Wave of terminal crisis for the US Dollar, US T-Bond and GBP, and the return of inflation.
===
Whilst not agreeing with all comments, some make sense. |
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By: perceptions_now
11/08/2009
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Following is the link to the last article.
There is also a good chart on past Recessions & Depressions, in terms of when they happened & their duration.
http://www.leap2020.eu/GEAB-N-36-is-available!-Glo bal-systemic-crisis-in-summer-2009-The-cumulative- impact-of-three-rogue-waves_a3359.html |
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By: ddrcn@y7mail.com
11/08/2009
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Why do you think the FDIC could need $500 Billion?
x x x
Simple:bonuses
Thanks perceptions for making all the info in your posts available to us all |
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By: perceptions_now
11/08/2009
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"Thanks perceptions for making all the info in your posts available to us all"
ddrcn@y7mail.com,
My pleasure! |
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By: perceptions_now
11/08/2009
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"Why do you think the FDIC could need $500 Billion?
x x x
Simple:bonuses"
ddrcn@y7mail.com,
Yes, and that only GS! |
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By: foxdemonau
11/08/2009
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One of the notes at the bottom of the article on PN's link:
"(9) US Treasury’s Secretary of State, Timothy Geithner, recently suffered a very embarrassing experience whilst giving a speech in front of Beijing University students: his audience simply burst into laughter when he reassured that the Chinese government had made the right choice investing their holdings in US T-Bonds and Dollars (source: Examiner/Reuters, 6/02/2009)! There is nothing worse than arousing irony or ridicule when you are an established power because that power is nothing without respect (on the part of both friends and enemies), especially when the one mocking is supposed to be “trapped” by the one mocked. According to LEAP/E2020, this laughter is worth a thousand explanations of the fact that China does not feel at all « trapped » by the US dollar and the Chinese authorities know exactly what tracks greenbacks and T–Bonds are following. This kind of situation was unthinkable only 12 months, maybe even 6 months ago, first because the Chinese were still naive, second because they thought it was in their interest to make everyone believe they were naive. Obviously, on the eve of summer 2009, this situation has vanished: no need to pretend anymore, as highlighted by this survey of 23 famous Chinese economists, published on the first day of Timothy Geithner’s visit to Beijing, and revealing that most of them deem US assets « risky » (source: Xinhuanet, 05/31/2009). This student burst of laughter will continue to echo for many months to come…" |
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By: perceptions_now
12/08/2009
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Monetizing the Debt: Open Market Operations and Statistics
The key questions remain:
allocations to primary dealers in 2009 Bond auctions is an undisputed majority (55%) of all auctions - this is troubling due to the recent change in the definition of indirect purchasers as well as the markedly reduced interest of foreign buyers such as China and other indirects, for US Treasuries."
Link -
http://seekingalpha.com/article/155151-monetizing- the-debt-open-market-operations-and-statistics?sou rce=email#comment-625834
================
Seriously, the key concern is whether the Chinese & others will continue to stay away?
Because, if they do, the ramifications will become obvious, in the not too distant future! |
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By: perceptions_now
12/08/2009
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"this is troubling due to the recent change in the definition of indirect purchasers as well as the markedly reduced interest of foreign buyers such as China and other indirects, for US Treasuries."
fox,
The reduction in Chinese interest in US Treasuries, may explain -
"This student burst of laughter will continue to echo for many months to come"
In fact, the echo, to the lack of interest in US Treasuries, may reverberate longer and the ramifications may be louder! |
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By: perceptions_now
12/08/2009
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Mexico Oil Production to Fall 4.9%, Drop Through 2012
Aug. 11 (Bloomberg) -- Mexico's oil production may fall 4.9 percent next year as the nation faces the greatest "fiscal shock" in 30 years, Finance Minister Agustin Carstens told a Senate committee today.
Lower output is costing the nation as much as 300 billion pesos ($23.05 billion) in lost sales annually and may create a deficit in the federal budget next year, Carstens said. Oil revenue funded 38 percent of the government's budget last year.
Mexico's economy, the second-largest in Latin America, may have shrunk as much as 10.4 percent in the second quarter as remittances, foreign direct investment and exports fell, according to a government report last month. Standard & Poor's in May placed Mexico's credit rating on negative outlook as the government struggles to narrow its fiscal deficit.
"We are going to face a huge hurdle to pass a budget that maintains the stimulus with less government revenue," Carstens said.
Link -
http://www.bloomberg.com/apps/news?pid=20601072&si d=a_Ba7raz8cnY
===============
That means the US will need to buy more from other Oil markets, just to stand still, in a total market where production is falling.
That lower production reality is also a reflection of the global Oil markets and it suggests a few scenario's -
1) The global economy continues with the status quo in the short term, Demand outsrips Supply and forces Oil Prices dramatically higher.
2) The global economy is restrained (involuntarily ?), Demand weakens, Supply catches up and Oil Prices Fall.
3) The economy fluctuates, between the desire to reinstate "the exponential Growth Fairy" and the reality of falling Oil Production & Higher Oil Prices, whilst the Economy trends down overall, in the short to medium term. |
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By: perceptions_now
12/08/2009
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"We are going to face a huge hurdle to pass a budget that maintains the stimulus with less government revenue," Carstens said."
They, the Mexican's, will not be lonely in this dilemna of falling Revenue & rising Costs, there will be many other nations "enjoying" similar economic hurldes! |
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By: perceptions_now
12/08/2009
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| hurldes = hurdles |
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By: perceptions_now
12/08/2009
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| "Economics is extremely useful as a form of employment, for economists." |
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By: perceptions_now
12/08/2009
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UBS Tax Lawsuit Settled by U.S., Swiss Governments
Aug. 12 (Bloomberg) -- The U.S. and Switzerland settled a Justice Department lawsuit against UBS AG seeking the names of Americans suspected of evading taxes through 52,000 secret Swiss accounts.
The governments have initialed agreements and will later sign a final accord, Justice Department lawyer Stuart Gibson told U.S. District Judge Alan Gold in Miami today.
Gibson didn’t disclose details of the settlement or say when it would be delivered to Gold.
Tax lawyers said they expect UBS to disclose thousands of accounts after giving the Internal Revenue Service data on 250 clients on Feb. 18. UBS, based in Zurich, agreed then to pay $780 million to defer prosecution for aiding tax evasion.
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It will be of interest to see how this unfolds in the US and Switzerland.
I will also interested to see what actions are taken by Australian authorities seeking the names of Australians suspected of evading taxes through secret Swiss accounts? |
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By: andreihicks
13/08/2009
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I think Swizerland will regret compromising its banking system and pandering to foreign powers on this one.
It won't play well with its citizens who are very proud of the Swiss system of non-compliance and neutrality. |
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By: tree5hyme
13/08/2009
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Pretty obvious it is happening big time-one is
entitled to ask who put this on? |
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By: perceptions_now
13/08/2009
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It's the real economy, stupid
CHART A - depicts worldwide industrial production in a comparison between April 2008
and June 1929. 3 Very similar trajectories.
Chart B - New home sales are down 73% from the all time high of 1,283,000 new homes sold in 2005 (mild recession?).
Chart C - below plots a return comparison of the Dow Jones Industrial Average between
1929 and 2007. Another frightening comparison to 1929.
Chart D - we provide data by Robert Shiller that plots the real, inflation-adjusted P/E ratio of the
S&P 500 stock index from January 1900 to June 2009.
Chart E - plots the real P/E ratio of the S&P 500 Index fifty months out from 1929 and compares it to the recent real P/E ratio performance from April 2008 to June 2009.
Link -
http://www.sprott.com/Docs/MarketsataGlance/July_2 009.pdf
===================
Failing some new, unknown innovation, these Charts are likely to show the indicative trajectory of the global economy, over the time ahead. |
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By: perceptions_now
13/08/2009
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World crude production has peaked: Pickens
WASHINGTON (Reuters) - World crude oil production has topped out at 85 million barrels per day even as demand keeps climbing, helping to drive a stunning surge in prices, billionaire oil investor T. Boone Pickens said on Tuesday.
"I do believe you have peaked out at 85 million barrels a day globally," Pickens, who heads BP Capital hedge fund with more than $4 billion under management, said during testimony to the Senate Energy and Natural Resources Committee.
The United States alone has been using "21 million barrels of the 85 million and producing about 7 of the 21, so if I could take just a minute on this point, the demand is about 86.4 million barrels a day, and when the demand is greater than the supply, the price has to go up until it kills demand," Pickens told lawmakers.
Link -
http://uk.reuters.com/article/idUKN173405842008061 7
=====================
Worthwhile for what it says and who said it!
PS - Production continued to fall. |
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By: perceptions_now
14/08/2009
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Toxic Loans Topping 5% May Push 150 Banks to Point of No Return
Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank's equity and threaten its survival.
Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.
The list excluded U.S. territories and lenders that have already failed. Also left out were the 19 lenders that underwent the Treasury's stress tests in May; they were deemed "too big to fail" and told by regulators that government capital was available to keep them in business.
Excluding the stress-test list, banks with nonperformers above 5 percent had combined deposits of $193 billion, according to Bloomberg data. That's almost 15 times the size of the FDIC's deposit insurance fund at the end of the first quarter.
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Two things come to mind -
1) If proper MARKET VALUATIONS were brought to bear, then very few US Banks (including those too big to fail) would still be solvent!
2) "If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State." |
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By: perceptions_now
14/08/2009
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Sorry, link for previous post.
http://www.bloomberg.com/apps/news?pid=20601087&si d=aTTT9jivRIWE |
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By: perceptions_now
14/08/2009
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For further perspectives on Peak Oil, check out the "Reality Check video", on the following site.
http://www.financialsense.com/ |
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By: pansi1951
14/08/2009
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| Thanks for the info perceptions. |
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